CUs Must Adapt to Reach Unbranched Members

Branches won’t disappear in the future, but they’ll have a different look and feel.

The explosive growth in mobile devices means credit unions must adapt to changes in how members obtain financial services.

“We’re talking about those people who don't need branches,” says Tim Harrington, president of TEAM Resources. “We may want branches, we may like branches, but the fact is we don't need branches except for a very few things.”

Branches won’t necessarily disappear, Harrington says. They’ll just operate differently and have a different feel.

One way branches may evolve, Harrington says, is by offering nonbanking-related products that could potentially drive consumers to the physical locations.

Capital One 360, for example, has opened coffee shops that double as bank service centers throughout the U.S. Each barista can switch hats and serve up financial guidance in addition to java.

“If you spend time in their branch, chances are you're going to talk to a customer services representative and you're going to learn about their products and services,” Harrington says.

Financial institutions also are creating micro-branches that keep services simple, and boutique branches that feel more like Apple stores, Harrington says.

While these methods are still largely untested, they demonstrate how financial institutions have acknowledged the evolution of the branch, and are testing ways to adapt, he adds.

Further, even if the methods prove successful, most financial services will continue to be driven by mobile technology, which will still limit a credit union's ability to sell products through its physical branches.

So how can credit unions sell products to members they rarely or never see? By building relationships with them and maximizing time with members whenever and wherever there’s contact—online, via social media, on the phone, and the occasional in-person opportunity, Harrington says.

"Physical branch locations will still be important to attracting people and handling complex transactions," Harrington said. "But it's going to change."

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